Days of zero-down mortgages over

[TheBreeze]

Hmmm … it does indeed look like there is a way to get a zero-down loan through FHA:

“On Sept. 28, the Housing and Urban Development issued its final rule regarding the use of seller-funded down payment assistance programs. This ruling stated that, effective Oct. 31, HUD would prohibit the use of down payment assistance programs that, in whole or in part, consists of funds provided by any of the following parties before, during or after closing of the property sale: the seller or any other person or entity that financially benefits from the transaction; any third party or entity that is reimbursed directly or indirectly by the seller; or any other person or entity that financially benefits from the transaction.

At that point in time, in order for a homebuyer to use a gift that was derived from the seller, they must have entered into a contract to sell and the contract must have been fully executed and the offer accepted before that date. The Nehemiah Program was excluded from the Oct. 31 date because of a settlement agreement entered into between the Nehemiah and HUD in April 1998. The Nehemiah Program was permitted to go until March 31.

As a result of the ruling making these assistance programs void and leaving homebuyers without down payment assistance, organizations such as AmeriDream and Nehemiah immediately filed lawsuits in Federal Court to challenge the merits of HUD’s rule and seek an injunction blocking the implementation of this rule. On Nov. 1, FHA sent notification that the U.S. District Court now has forbidden FHA to implement the discontinuance of down payment assistance programs. In other words, until further notice, down payment assistance is alive and well.”

http://www.newarkadvocate.com/apps/pbcs.dll/article?AID=/20080119/NEWS01/801190374/1002

Thank God the government is still guaranteeing zero-down loans.

[Eugene]

My current position is that raising conforming limits for Fannie and Freddie is ultimately a good thing.

Here’s what will happen. Bond traders have no interest in holding MBS that mix high-risk jumbo loans with regular conforming loans. Freddie Mac CEO has already stated explicitly that they are going to isolate new loans in a separate pool. Fannie will have to do the same.

In 2005-2007, despite generous housing-to-income requirements of private lenders, most jumbos were stated income. How many people can really qualify for a new conforming jumbo? (Best case scenario, you’ll need 180K documented income to get a median house in 4S Ranch) My guess is, a minority. That minority will benefit from lower rates on jumbos. (Still, jumbo rates won’t come down all the way to conforming, some rate differential will remain) As an unintended consequence, private-label jumbos will suddenly become the 2008 version of subprime/Alt-A – all safe customers are gone to GSEs, the remaining ones are no good, either interest rates go up or the entire market disappears.

Net effect – fewer jumbos given to fewer customers, fewer houses sold in high-end areas.

[Eugene]

My current position is that raising conforming limits for Fannie and Freddie is ultimately a good thing.

Here’s what will happen. Bond traders have no interest in holding MBS that mix high-risk jumbo loans with regular conforming loans. Freddie Mac CEO has already stated explicitly that they are going to isolate new loans in a separate pool. Fannie will have to do the same.

In 2005-2007, despite generous housing-to-income requirements of private lenders, most jumbos were stated income. How many people can really qualify for a new conforming jumbo? (Best case scenario, you’ll need 180K documented income to get a median house in 4S Ranch) My guess is, a minority. That minority will benefit from lower rates on jumbos. (Still, jumbo rates won’t come down all the way to conforming, some rate differential will remain) As an unintended consequence, private-label jumbos will suddenly become the 2008 version of subprime/Alt-A – all safe customers are gone to GSEs, the remaining ones are no good, either interest rates go up or the entire market disappears.

Net effect – fewer jumbos given to fewer customers, fewer houses sold in high-end areas.

[Eugene]

My current position is that raising conforming limits for Fannie and Freddie is ultimately a good thing.

Here’s what will happen. Bond traders have no interest in holding MBS that mix high-risk jumbo loans with regular conforming loans. Freddie Mac CEO has already stated explicitly that they are going to isolate new loans in a separate pool. Fannie will have to do the same.

In 2005-2007, despite generous housing-to-income requirements of private lenders, most jumbos were stated income. How many people can really qualify for a new conforming jumbo? (Best case scenario, you’ll need 180K documented income to get a median house in 4S Ranch) My guess is, a minority. That minority will benefit from lower rates on jumbos. (Still, jumbo rates won’t come down all the way to conforming, some rate differential will remain) As an unintended consequence, private-label jumbos will suddenly become the 2008 version of subprime/Alt-A – all safe customers are gone to GSEs, the remaining ones are no good, either interest rates go up or the entire market disappears.

Net effect – fewer jumbos given to fewer customers, fewer houses sold in high-end areas.

[Eugene]

My current position is that raising conforming limits for Fannie and Freddie is ultimately a good thing.

Here’s what will happen. Bond traders have no interest in holding MBS that mix high-risk jumbo loans with regular conforming loans. Freddie Mac CEO has already stated explicitly that they are going to isolate new loans in a separate pool. Fannie will have to do the same.

In 2005-2007, despite generous housing-to-income requirements of private lenders, most jumbos were stated income. How many people can really qualify for a new conforming jumbo? (Best case scenario, you’ll need 180K documented income to get a median house in 4S Ranch) My guess is, a minority. That minority will benefit from lower rates on jumbos. (Still, jumbo rates won’t come down all the way to conforming, some rate differential will remain) As an unintended consequence, private-label jumbos will suddenly become the 2008 version of subprime/Alt-A – all safe customers are gone to GSEs, the remaining ones are no good, either interest rates go up or the entire market disappears.

Net effect – fewer jumbos given to fewer customers, fewer houses sold in high-end areas.

[Eugene]

My current position is that raising conforming limits for Fannie and Freddie is ultimately a good thing.

Here’s what will happen. Bond traders have no interest in holding MBS that mix high-risk jumbo loans with regular conforming loans. Freddie Mac CEO has already stated explicitly that they are going to isolate new loans in a separate pool. Fannie will have to do the same.

In 2005-2007, despite generous housing-to-income requirements of private lenders, most jumbos were stated income. How many people can really qualify for a new conforming jumbo? (Best case scenario, you’ll need 180K documented income to get a median house in 4S Ranch) My guess is, a minority. That minority will benefit from lower rates on jumbos. (Still, jumbo rates won’t come down all the way to conforming, some rate differential will remain) As an unintended consequence, private-label jumbos will suddenly become the 2008 version of subprime/Alt-A – all safe customers are gone to GSEs, the remaining ones are no good, either interest rates go up or the entire market disappears.

Net effect – fewer jumbos given to fewer customers, fewer houses sold in high-end areas.

[SD Realtor]

Make no mistakes about it, there will be more sales activity due to this stimulus whether we are talking FHA or the conforming limits. To be sure, to me this simply represents a further burden to the taxpayers…. it is just delaying the inevitable….we will pay though, it doesn’t matter how prudent we are.

SD Realtor

[SD Realtor]

Make no mistakes about it, there will be more sales activity due to this stimulus whether we are talking FHA or the conforming limits. To be sure, to me this simply represents a further burden to the taxpayers…. it is just delaying the inevitable….we will pay though, it doesn’t matter how prudent we are.

SD Realtor

[SD Realtor]

Make no mistakes about it, there will be more sales activity due to this stimulus whether we are talking FHA or the conforming limits. To be sure, to me this simply represents a further burden to the taxpayers…. it is just delaying the inevitable….we will pay though, it doesn’t matter how prudent we are.

SD Realtor

[SD Realtor]

Make no mistakes about it, there will be more sales activity due to this stimulus whether we are talking FHA or the conforming limits. To be sure, to me this simply represents a further burden to the taxpayers…. it is just delaying the inevitable….we will pay though, it doesn’t matter how prudent we are.

SD Realtor

[SD Realtor]

Make no mistakes about it, there will be more sales activity due to this stimulus whether we are talking FHA or the conforming limits. To be sure, to me this simply represents a further burden to the taxpayers…. it is just delaying the inevitable….we will pay though, it doesn’t matter how prudent we are.

SD Realtor

[Eugene]

Make no mistakes about it, there will be more sales activity due to this stimulus whether we are talking FHA or the conforming limits

A question …

What would be a typical interest rate on a $300,000 30-year fixed loan with housing-to-income ratio of 40%, or “stated income”? Compared with “conforming” (say, 25% housing-to-income)?

Let’s assume FICO 750 and 80% loan-to-value.

[Eugene]

Make no mistakes about it, there will be more sales activity due to this stimulus whether we are talking FHA or the conforming limits

A question …

What would be a typical interest rate on a $300,000 30-year fixed loan with housing-to-income ratio of 40%, or “stated income”? Compared with “conforming” (say, 25% housing-to-income)?

Let’s assume FICO 750 and 80% loan-to-value.

[Eugene]

Make no mistakes about it, there will be more sales activity due to this stimulus whether we are talking FHA or the conforming limits

A question …

What would be a typical interest rate on a $300,000 30-year fixed loan with housing-to-income ratio of 40%, or “stated income”? Compared with “conforming” (say, 25% housing-to-income)?

Let’s assume FICO 750 and 80% loan-to-value.

[Eugene]

Make no mistakes about it, there will be more sales activity due to this stimulus whether we are talking FHA or the conforming limits

A question …

What would be a typical interest rate on a $300,000 30-year fixed loan with housing-to-income ratio of 40%, or “stated income”? Compared with “conforming” (say, 25% housing-to-income)?

Let’s assume FICO 750 and 80% loan-to-value.

[Author]

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